Nominations for TTAC's Ten Worst Automobiles awards continue apace. You, our not-so-gentle readers, are cordially invited to continue submitting your ruminations on these ruinations underneath this post. So far you've nominated 118 different vehicles (give or take a few clones). While we're not keeping track of how many nominations any given car receives, there are already a few clear front runners. Here's a roundup of the "leading" nominations and their pithy proponents…
Posts By: Frank Williams
Last year about this time, we gazed into the crystal ball to predict a few changes in the automotive world. A lot of water's gone under the proverbial bridge since then: Toyota's world number one, the UAW's selling out their membership for a few dozen billion, Ford and Chrysler are attempting turnarounds with leaders who have no automotive industry experience whatsoever and GM Car Czar Bob Lutz is straining his personal credibility beyond breaking point. Well, OK, some things haven't changed. Anyway, with all that's happened in the past year, what does the future hold? Here are some of our predictions.
Even as Chrysler workers ponder whether or not to accept their new contract, GM is bragging about announcing the blessings the union has bestowed on the automaker's bottom line. Under the two-tier wage structure in the new United Auto Workers (UAW) contract, GM will be paying "non-core” workers about a third less in wages and benefits than they presently shell-out to their union workers. The Detroit Free Press reveals that revisions to these employees' pension fund and health coverage will lower their cost to the company to $25.65 per hour. That's compared to the $78.21 per hour in wages and benefits GM currently pays all their UAW workers. What's more, GM expects 65 to 75 percent of their hourly employees to retire during the four-year life of the contract; many of these retirees will be replaced with lower-paid workers. CFO Fritz Henderson predicts the new labor deal will save The General some $2.8b in annual cash flow by 2010, and $3.3b by 2011.
The Detroit News reports that the United Auto Workers' (UAW) local officials have accepted the tentative contract agreement with Chrysler. Despite the vote, some high-ranking UAW officials- including the head of the UAW bargaining committee- aren't what you'd call sold on the deal. Citing issues with job guarantees (i.e. there aren't any) and the two-tier wage agreement (no provision for temporary workers' transition to full-time employment), they plan to campaign against the Chrysler agreement's ratification. UAW boss Ron Gettelfinger doesn't appear worried at the prospect of an internal rift, assuring Automotive News [AN, sub] that the contract vote was overwhelmingly in favor of the agreement. Yes, well, the exact results of the vote were not released, and AN forgot to ask Big Ron to define "overwhelmingly." Chrysler's 45k rank and file UAW members will vote on the proposed Chrysler contract later this week. Gettlefinger is confident this his union brothers and sisters will accept the new agreement as he moves on to capitulate negotiate with Ford.
The Truth About Cars (TTAC) strives to report on all things automotive with the complete, unvarnished, unadulterated, no-holds-barred truth. All our authors write from a single-minded perspective: the consumer’s interests are more important than those of the industry. All our commentators keep us– and the industry– honest. In other words, we’re all a bunch of troublemakers. And it’s time once again to make some trouble. Ladies and gentlemen, I’m proud to announce that nominations are now open for TTAC’s second annual Ten Worst Awards.
Ford Model T. Volkswagen Type 1. Tata People's Car. Tata what? Next fall, Indian automaker Tata plans to introduce a $2,500 car to put India's masses on wheels, just as Ford and VW did in their home countries. The New York Times reports that Tata is one of several automakers who want a piece of the entry-level pie in what will soon be the world's fastest-growing car market. (Maruti Suzuki currently controls more than 50 percent of that market, with models as low as $5k.) As Tata moves even further down market, they're joined by Honda, VW (Skoda), Toyota, Renault-Nissan and Ford. While critics are worried about the safety of such cheap cars, the automakers all say they'll meet local safety standards (how reassuring is that?). Needless to say, environmentalists are expressing concerns that more cars on India's roads will exacerbate India's air pollution problem.
Carmakers should add more flash and trash to their web sites. Words of wisdom from CarGurus.com CEO Langley Steinart. Speaking with Advertising Age [sub], Steinart asserted that a six-month study of shoppers on his website indicated that 62 percent of pages viewed consisted of photos and videos. Based on this info, he uncategorically concludes that online shoppers "first and foremost want videos." He was shocked (shocked I tell you) to discover that car-shopping web surfers have to read automakers' websites to glean information about a car. "You have to fall in love with the car visually. Are you going to fall in love over braking power?" Regarding the science behind his study, Mr. Steinart admits he has no way of knowing his site's demographics– other than they "cut across all ages." The Guru-in-Chief also couldn't say how may visitors to his site are shopping for a vehicle (instead of reading editorials and blogs or looking for parts, accessories or automotive epiphanies). With his ability to make leaps of logic in a single bound, we reckon Steinart has a bright future in marketing research.
No seriously. The Kingdom of Norway may become the first nation on God's green Earth to ban all gasoline-only cars. Citing Brazil's success with bioethanol as their rationale, Norwegian lawmakers are considering ditching petrol-only machines completely, in favor of biofuel-powered transportation. The United Press International reports that Center Party committee member Jenny Klinge feels banning sales of gasoline-powered cars to her country's 4.7m residents "would pressure the automobile industry into developing technology faster than it otherwise would." The Norwegian Transport ministry is trying to determine if such a ban would be legal. Meanwhile, Norway's many corn, soybean, and sugar cane farmers are excited about the prospects of a new market for their crops.
In this morning's Detroit Free Press, Tom Walsh declares that United Auto Workers (UAW) president Ron Gettelfinger had to "flex worker's muscles" by staging a six-hour strikelet against Chrysler. Gettelfinger "felt compelled to deploy the biggest weapon in his arsenal, the strike" to get agreements from GM and Chrysler. Granted, a strike is any unions' ultimate bargaining tool. But get real. I've had doctor's appointments that lasted longer than the Chrysler "strike." Exactly what did the UAW accomplish yesterday– besides costing its members six hours' pay?
Showing a Farago-like faith in GM's future, a current GM employee and retiree have challenged the use of a $4.4b "convertible note" as part payment for the VEBA health care superfund in the new United Auto Workers (UAW) contract with The General. According to the Detroit News, the complainants are concerned that the trust fund would be at risk should GM filed for bankruptcy. In a letter filed with the Securities and Exchange Commission, the workers said GM hasn't disclosed enough information about the note and should have released a formal prospectus. Their suit also states that the details given "fell dramatically short of the standards" for such a transaction. Although GM is "confident" they "complied with all applicable securities laws," this is just one more case the SEC will add to their list of GM accounting investigations. (You didn't think we forgot, did you?)
GM's OnStar system is a regular little Yenta. It already helps owners decide where to go, tells them how to get there, remotely unlocks doors for forgetful PGA golfers, runs remote diagnostics on the car (and emails the results), summons first responders in an accident, helps police track the vehicle if it's stolen and finds you a nice Jewish girl to marry (well, almost). If that wasn't intrusive helpful enough, The AP (via the Miami Herald) reports the next step in OnStar's eNannyism: Robocopping car thieves. First, they'll advise the miscreant that the police are watching. If the crook isn't prone to paranoia (do you hear voices?), OnStar's helpful representative will cut engine power until the vehicle slows to a stop– provided police deem it safe to do so. OnStar says owners can opt out of the engine kill switch program, but also claim 95 percent of their subscribers are down with it. Yes but– I doubt they raised the possibility that the technology could also be used as a speed limiter. Anyway, it's only a matter of time before plans for an OnStar jamming device hits the web.
According to The Detroit News, Ford has the second highest research and development (R&D) budget of any company in the world. That's not the second highest in the auto industry. That's the second highest R&D budget of any company in all industries. Ford's $8b R&D budget is second only to Pfizer's, higher than Microsoft's or Johnson & Johnson's. The second place amongst automakers falls to Daimler (formerly DaimlerChrysler, née Daimler-Benz) with a $7.34b budget. The total places it as Europe's biggest spender– but only seventh overall. So let's see… what are we getting from Ford's massive investment in R&D? There's a "new" Taurus which is a Five Hundred with a blinged-out grille, a "new" Focus that's based on an eight-year-old platform, an entire brand that's nothing more than rebadged Fords, and a "luxury" car brand with a 10-year-old flagship model sitting on a 30-year old platform. Yep. Sounds like money well spent to me.
Last January, Ford canceled plans to invest as much as $1b in factories in Thailand. FoMoCo reckoned it couldn't make their money pay off given the currency controls imposed by Thailand's new military-backed government. Bloomberg reports they've reconsidered. The Blue Oval Boyz will team-up with Mazda and shell-out $500m (each) to set-up a joint factory (so to speak) in the former Siamese Kingdom. Ford and Mazda already have shared facilities in China and a pickup truck factory in Thailand. The new venture is looking to export the Mazda2 and/or other products to other countries in the region: Australia, New Zealand and South Africa. They'd better; Ford says the Thai plant will be able to crank-out 275k units per year.
September wasn't kind to the auto industry. Total U.S. light vehicle sales ended the month 2.9 percent below September 2006. The year-to-date (YTD) news wasn't very encouraging either; sales for the first nine months of 2007 are 2.8 percent below the same time last year. Of The Big 2.8, only GM finished the month (barely) in the black. Ford, Chrysler, and Toyota all posted declines compared with last September. Looking at our four-wheeled sampler, separating the winners from the losers is a matter of seeing who lost less.
Echoing a sentiment expressed by many TTAC readers, Advertising Age [sub] wonders if Jeep faces death by line extension. The mag suggests that Jeep's move from three models to seven in less than three years is ill-advised. Chrysler's excuse rationale: Jeep is the only of their three brands showing a sales increase; they need to capitalize on that momentum. And, lest we forget, most Americans don't drive off-road. As one Chrysler exec stated, "Now we have something for everybody." Consultant Gary Topolewski, formerly Jeep's top creative, says the brand is losing its toughness. He thinks the current "Have Fun Out There" ad campaign is too "cute" to jibe with Jeep's longtime image as the tough, go-anywhere vehicle. Jeep just doesn't seem to realize that once you lose an iconic image, you can never get it back. Just ask Cadillac.
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